DIP Loans

DIP loans, or Debtor-in-Possession loans, are financing options specifically for companies undergoing bankruptcy. When a business files for Chapter 11, it typically continues operations while reorganizing its debts. DIP loans provide these businesses with the necessary capital to maintain operations, pay employees, and manage day-to-day expenses during the restructuring process. Unlike regular loans, DIP financing is prioritized by the courts, meaning lenders have a better chance of being repaid. Essentially, these loans help struggling businesses stay afloat while they devise a plan to recover and become profitable again.